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Government approves extension of payment deadline for two power firms

20 August 2014, 19:15

Abuja -  Federal Government had approved the extension of payment deadline by preferred bidders of Afam Power Plc and Kaduna Electricity Distribution Company by 60 days.

With the extension, both bidders would be expected to make their full and final payments by October 6.

Also read : Investors in power firms to assume full ownership after payment

The decision to extend, rather than cancel the sale of the firms, was because the government did not meet some of the agreements made during the transaction.

Televeras Group, the preferred bidder for Afam, pleaded the non-execution of the gas agreements required to bring the transaction to a financial conclusion and security challenges as reasons for seeking the extension.

Northwest Power Limited, the preferred bidder for the Kaduna Electricity Distribution Company requested an extension of transaction timeline due to the recent security challenges experienced within the Kaduna Electricity Distribution Company which made its offshore financiers to postpone disbursement of bank facilities already obtained.

The company explained that though it had secured financing for the transaction from a foreign bank, the bank had requested for additional time to review the transaction in the aftermath of the security challenges in Kaduna to ensure the safety of its funds.

Televeras had paid the initial deposit of 25 percent of the bid price of $65 012 500 for the Afam Power Plant.

Northwest Power Plc paid $40 750 000 for the Kaduna Electricity Distribution Company following which the Share Purchase Agreements (SPA) were executed by the two parties.

-      NAN

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